why does low unemployment cause inflation?

Question

why does low unemployment cause inflation?

In: 6

Answer 1

In terms of being a primary contributor, its very far down the list.

Employment is not a good way to look at inflation because more labor would create more supply. Less labor would create less demand. But there is always a temptation to blame the labor market for corporate greed.

Market consolidation, price manipulation, and supply shortages are the primary driver of inflation.